The market for critical minerals, which are essential for the manufacture of electric vehicle (EV) batteries, is going through a period of turbulence. While lithium and cobalt prices have followed volatile trajectories, nickel, a key component of lithium-ion batteries, has had its own saga. From a dramatic surge in 2022, marked by a clash between trading giants, to a gradual decline in prices in 2025, nickel remains a strategic investment area despite the challenges.
In March 2022, the nickel market was shaken by an unprecedented event at the London Metal Exchange (LME). A confrontation between Paul Singer of the Elliott hedge fund and Xiang Guangda, CEO of Chinese nickel giant Tsingshan, caused prices to skyrocket. Due to massive short positions, the price of nickel exceeded £80,000 per tonne in a matter of minutes, an all-time high. This crisis, known as a "short squeeze", led to the cancellation of £8 billion worth of transactions, legal proceedings and a review of the LME's trading mechanisms.
However, the immediate impact on the ground was limited. Nickel sulphate, used in EV batteries, reached over $30,000 per tonne (100% Ni basis) at the time, but prices quickly began to fall. In 2025, the average price stood at around $17,000 per tonne in the second quarter, according to market data.
Compared to lithium, nickel has experienced a more stable trajectory. Lithium prices, after peaking at over $80,000 per tonne in November 2022, collapsed to $8,450 in June 2025, a drop of nearly 90%. This decline reflects an oversupply and a slowdown in global demand. In contrast, nickel, although facing a downturn, remains a relatively resilient market, supported by its central role in nickel-manganese-cobalt (NMC) batteries used in many EVs.
Despite price volatility, nickel retains a prominent place in the EV industry. According to Adamas Intelligence, the value of nickel tonnes used in EV batteries (including plug-in hybrids and conventional EVs) sold worldwide from January to May 2025 amounts to $2.20 billion. This slightly exceeds the value of lithium, estimated at $2.15 billion over the same period. This figure is all the more significant given that nickel-free batteries, such as lithium iron phosphate (LFP) batteries, are gaining ground.
LFP batteries, which are cheaper and more stable, now account for nearly 50% of EV battery capacity deployed in 2025, compared to less than 1% in 2020. This rise in popularity of LFP batteries, particularly in China, has helped to curb demand for nickel. However, nickel-rich NMC batteries remain the preferred choice due to their higher energy density, which is essential for EVs with long ranges.
The decline in nickel prices in 2025 can be explained by a combination of factors. Increased production, particularly in Indonesia, which accounts for 50% of global supply, has created a glut. At the same time, the economic slowdown in China, the main consumer of nickel, has reduced demand. However, the long-term outlook remains positive, as the global energy transition continues to drive demand for EV batteries.
The nickel industry faces several challenges, including environmental concerns related to mining. Nickel extraction, often carried out in sensitive regions such as Indonesia, generates significant CO2 emissions and impacts on local ecosystems. Investors and EV manufacturers are therefore increasingly attentive to sustainable extraction practices.
Despite these challenges, nickel remains an attractive investment. Analysts predict a recovery in demand as EV sales rebound, driven by decarbonisation policies in Europe and the United States. In addition, innovations in battery recycling could reduce dependence on new extraction, stabilising prices in the long term.
| Metal | Value in EVs (billion USD) | Average price (USD/tonne) | Share in the batteries |
|---|---|---|---|
| Nickel | 2,20 | 17 000 | ~50 % (batteries NMC) |
| Lithium | 2,15 | 8 450 | ~50 % (batteries LFP/NMC) |
Although less volatile than the lithium market, the nickel market remains exposed to uncertainty. Investors must navigate between short-term risks (oversupply, economic slowdown) and long-term opportunities (growth in EVs, energy transition). Companies investing in sustainable extraction technologies and recycling processes could come out on top.
The nickel saga, marked by the spectacular episode of the 2022 short squeeze, illustrates the volatility of critical mineral markets. Despite a drop in prices to $17,000 per tonne in 2025, nickel remains a pillar of the EV industry, slightly surpassing lithium in value in batteries deployed this year. As LFP batteries gain ground, nickel retains a key role thanks to its energy density. For investors, the nickel market offers a balance between risks and opportunities, in a context where the energy transition is redefining global economic priorities.
